Case Name: Apple Inc. v. Gerard Williams III

Case No.: 19-CV-352866

Currently before the Court are: (1) the motion by defendant Gerard Williams III (“Williams”) for a protective order prohibiting discovery until plaintiff Apple Inc. (“Apple”) provides a trade secret designation under Code of Civil Procedure section 2019.210 or, alternatively, staying discovery until a ruling is issued on his demurrer and motion to strike; (2) the joinder by non-party NuVia, Inc. to the motion for protective order; (3) the demurrer by Williams to the complaint; and (4) the motion by Williams to strike portions of the complaint.

Factual and Procedural Background

This action arises out of Williams’ alleged breaches of an intellectual property agreement (“IPA”) he entered into with Apple and his development of a competing business, NuVia. Williams joined Apple in 2010, as a senior platform architect. (Complaint, ¶¶ 2 & 17.) While at Apple, Williams designed chips for a range of Apple products and worked with, advised, and led teams that designed some of Apple’s ARM technology. (Id. at ¶¶ 2, 15-16, & 23-25.)

As a condition of his employment, Williams executed an IPA whereby he agreed that he would not plan or engage in any other employment, occupations, consulting, or other business activities or commitments competitive with or directly related to Apple’s business or products during his tenure with Apple. (Complaint, ¶¶ 18, 19, & 45.) Williams further agreed that all inventions resulting from or suggested by work performed by him for Apple would be Apple’s sole and exclusive property. (Id. at ¶¶ 21 & 48.) Finally, Williams agreed that he would promptly disclose all inventions and perform all acts needed to assign inventions to Apple. (Ibid.)

During his employment with Apple, Williams allegedly planned and developed Nuvia, a competing business that builds chips using technology that is directly related to William’s work with Apple. (Complaint, ¶¶ 1, 4, 6, 27-34, 46.) Williams also recruited Apple employees to work for NuVia while he was still employed with Apple. (Id. at ¶¶ 1, 4, 5, 31, 35-40, & 46.)

Williams allegedly breached the IPA by planning and developing NuVia during his tenure with Apple and failing to disclose and assign to Apple inventions developed for NuVia that were based on work resulting from or suggested by his work for Apple. (Complaint, ¶¶ 45-50.) Additionally, Williams allegedly breached a duty of loyalty owed to Apple by starting a competing business, NuVia, during his employment with Apple and failing to disclose “his work in the same space as Apple.” (Id. at ¶ 55.)

Based on the foregoing allegations, Apple filed a complaint against Williams, alleging causes of action for: (1) breach of contract; and (2) breach of duty of loyalty.

Discovery Dispute

In September 2019, Apple served Williams with requests for admission, form and special interrogatories, and requests for production for documents, seeking information and documents relating to Apple’s claims. In his responses to the discovery requests, Williams objected on the ground that the action was one for trade secret misappropriation and Apple had not served a trade secret disclosure under Code of Civil Procedure section 2019.210. The parties met and conferred regarding the discovery requests, but were unable to resolve their dispute.

In early November 2019, Williams filed a demurrer and motion to strike, which were set for hearing on January 21, 2020.

Thereafter, Williams filed a motion asking the court to designate the action as a complex case, asserting among other things that the case involved trade secret law.

On November 18, 2019, Williams filed a motion for protective order, which was set for hearing on January 14, 2019.

The court (Hon. Thomas E. Kuhnle) issued an order on December 6, 2019, denying Williams’ motion to designate the action as a complex case. In its order, the court noted that there was no trade secret cause of action.

On December 31, 2019, Apple filed papers in opposition to the motion for protective order.

Subsequently, NuVia filed a notice of joinder to the motion on January 6, 2020.

The next day, Williams filed a reply in support of his motion for protective order. That same day, Apple filed papers in opposition to Williams’ demurrer and motion to strike.

Approximately one week later, the parties stipulated to continue the hearing on the Williams’ motion to protective order to January 21, 2020.

Discussion

I. Joinder

NuVia filed its joinder to the pending motion for protective order on January 6, 2020, and electronically served the joinder on Apple the same day.

A joinder is subject to the same notice and service requirements as the moving party’s motion. (See Frazee v. Seely (2002) 95 Cal.App.4th 627, 636-637; see also Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 719; Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1176.) Thus, similar to the motion for protective order, NuVia was required to file and serve its joinder 16 court days prior to the hearing. (See Code Civ. Proc., § 1005, subd. (b).)

Here, NuVia’s joinder was filed and served only 10 court days before the hearing. The joinder is, therefore, untimely. Given this procedural defect, Apple was prejudiced as it did not receive the joinder before it filed its opposition.

Furthermore, NuVia is not a party to this action and does not identify any legal authority demonstrating that it has standing to join in the instant motion.

Accordingly, NuVia’s joinder is DENIED.

II. Motion for Protective Order

Pursuant to Code of Civil Procedure section 2019.020, Williams moves for a protective order prohibiting discovery until Apple provides a trade secret designation under Code of Civil Procedure section 2019.210 or, alternatively, staying discovery until a ruling is issued on his demurrer and motion to strike.

A. Legal Standard

On motion and for good cause shown, the court may establish the sequence and timing of discovery for the convenience of parties and witnesses and in the interests of justice. (Code Civ. Proc., § 2019.020, subd. (b).)

Code of Civil Procedure section 2019.210 states that, in an action alleging the misappropriation of a trade secret under the CUTSA, “before commencing discovery relating to the trade secret the party alleging the misappropriation shall identify the trade secret with reasonable particularity.”

In Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826, the court held that the statute applies not only to misappropriation causes of action under the CUTSA, but also to any cause of action that hinges entirely upon allegations of trade secret misappropriation. (Id. at pp. 834-835 [holding that causes of action for breach of a licensing agreement were actions for misappropriation because the only breach of the agreement alleged by the plaintiff was misappropriation of a trade secret].)

In Perlan Therapeutics, Inc. v. Superior Court (2009) 178 Cal.App.4th 1333, the court stated in dicta that where a cause of action hinges at least in part on allegations of misappropriation, a court does not abuse its discretion by allowing discovery into non-misappropriation allegations, while requiring the party seeking discovery to comply with Code of Civil Procedure section 2019.210 before discovery will be allowed into allegations of trade secret misappropriation. (Id. at p. 1337, fn. 2.)

B. Analysis

Williams contends that Apple must provide a trade secret disclosure under Code of Civil Procedure section 2019.210 notwithstanding the fact that the complaint does not contain a cause of action for misappropriation of a trade secret. Williams asserts that the claims for breach of contract and breach of loyalty relate to and depend on him allegedly misappropriating trade secrets.

In opposition, Apple argues it is not alleging a claim for misappropriation of a trade secret under the CUTSA and its causes of action for breach of contract and breach of loyalty are not based on allegations that Williams misappropriated trade secrets.

The plain language of Code of Civil Procedure section 2019.210 indicates that the section only applies in an action “alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act ….” In the complaint, Apple alleges that Williams breached the IPA by planning and developing NuVia during his tenure with Apple and failing to disclose and assign to Apple inventions developed for NuVia that were based on work resulting from or suggested by his work for Apple. (Complaint, ¶¶ 45-50.) Additionally, Apple alleges that Williams breached a duty of loyalty owed to it by starting a competing business, NuVia, during his employment with Apple and failing to disclose “his work in the same space as Apple.” (Id. at ¶ 55.) Apple does not allege that Williams misappropriated its trade secrets. The complaint does not set forth a claim for trade secret misappropriation under the CUSTA and Apple’s causes of action for breach of contract and breach of duty of loyalty do not relate to any such claim. Thus, Code of Civil Procedure section 2019.210 does not apply to this action.

C. Conclusion

Accordingly, Williams’ motion for protective order is DENIED.

III. Demurrer

Williams demurs to the complaint, and each and every cause of action alleged therein, on the grounds of uncertainty and failure to allege facts sufficient to constitute a cause of action. (Williams’ Ntc. Dem., p. i:8-23; see Code Civ. Proc., § 430.10, subds. (e) & (f).)

A. Legal Standard

The function of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, “ ‘[a] demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice’ [citation].” (Hilltop Properties, Inc. v. State (1965) 233 Cal.App.2d 349, 353 (Hilltop); Code Civ. Proc., § 430.30, subd. (a).) “ ‘It is not the ordinary function of a demurrer to test the truth of the … allegations [in the challenged pleading] or the accuracy with which [the plaintiff] describes the defendant’s conduct. … .’ [Citation.] Thus, … ‘the facts alleged in the pleading are deemed to be true, however improbable they may be. [Citation.]’ [Citations.]” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958.)

B. Uncertainty

In his notice of demurrer, Williams indicates that he demurs to the complaint, and each of the causes of action alleged therein, on the ground of uncertainty.

However, Williams’ memorandum of points and authorities is devoid of any argument specifying an allegation in the complaint that Williams contends is uncertain, ambiguous, and/or unintelligible. The “failure to specify the uncertain aspects of a complaint will defeat a demurrer based on the grounds of uncertainty.” (Fenton v. Groveland Community Services Dist. (1982) 135 Cal.App.3d 797, 809, overruled on other grounds by Katzberg v. Regents of University of California (2002) 29 Cal.4th 300, 328, fn. 30.) Instead of identifying uncertain aspects of the complaint, Williams’ arguments address Apple’s purported failure to allege sufficient facts to state a claim. It appears that Williams misunderstands the nature of uncertainty as a ground for demurrer. The law is settled that “[a] special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading but is directed at the uncertainty existing in the allegations already made.” (Butler v. Sequiera (1950) 100 Cal.App.2d 143, 145-146.) Thus, Williams’ demurrer on the ground of uncertainty is not well-taken.

Accordingly, Williams’ demurrer to the complaint, and each and every cause of action alleged therein, on the ground of uncertainty is OVERRULED.

C. Failure to Allege Facts Sufficient to State a Claim

1. Breach of Contract

Williams initially argues the first cause of action for breach of contract fails to state a claim because it is premised on section 3.0 of the IPA and that section violates Business and Professions Code section 16600. Williams contends section 3.0 of the IPA violates Business and Professions Code section 16600 because it bars Apple employees from: (1) planning other employment, occupations, consulting, or other business activities or commitments competitive with or directly related to Apple’s business during the employees’ tenure with Apple; and (2) soliciting other Apple personnel after the employees’ employment with Apple has terminated.

Business and Professions Code section 16600 provides, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” That statute has consistently been interpreted as invalidating any employment agreement that unreasonably interferes with an employee’s ability to compete with an employer after his or her employment ends. (Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 509 (Angelica), citing Muggill v. Reuben H. Donnelley Corp. (1965) 62 Cal.2d 239, 242.) “However, the statute does not affect limitations on an employee’s conduct or duties while employed.” (Angelica, supra, 220 Cal.App.4th at p. 509.)

Additionally, “[w]hile California law does permit an employee to seek other employment and even to make some ‘preparations to compete’ before resigning [citation], California law does not authorize an employee to transfer his loyalty to a competitor. During the term of employment, an employer is entitled to its employees’ ‘undivided loyalty.’ [Citation.]” (Angelica, supra, 220 Cal.App.4th at p. 509, citing Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34, 41.) Thus, employees may plan and prepare to create a competitive enterprise prior to their termination, so long as they do so on their own time and with their own resources. (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 719 (Mamou).) Employees may not use the employer’s time, facilities, or proprietary information to build the competing business. (Ibid.)

As is relevant here, section 3.0, subdivision (a) of the IPA states, “You agree that during the tenure of your employment by Apple you will not plan or engage in any other employment, occupations, consulting, or other business activities or commitments competitive with or directly related to Apple’s business or products, or to its actual or demonstrably anticipated research or development, nor will you engage in any other activities that conflict with your employment obligations to Apple.” (Complaint, Ex. A.) Section 3.0, subdivision (d) of the IPA provides, “During your employment and for a period of one (1) year following your termination date, you will not, directly or indirectly, solicit, encourage, recruit, or take any action intended to induct Apple employees or contractors to terminate their relationship with Apple.” (Ibid.)

First, it is readily apparent that section 3.0, subdivision (a) of the IPA does not impact Williams’ ability to compete with Apple after his employment ends. Because the provision only prohibits certain conduct during Williams’ tenure with Apple, it does not violate Business and Professions Code section 16600. (See Angelica, supra, 220 Cal.App.4th at p. 509.)

Furthermore, the Court is not persuaded that section 3.0, subdivision (a) violates Business and Professions Code section 16600 to the extent it prohibits Williams from planning a competitive enterprise while employed with Apple. As explained above, an employee is not permitted to plan and prepare to create a competitive enterprise prior to termination if the employee does so on their employer’s time and with the employer’s resources. (Mamou, supra, 165 Cal.App.4th at p. 719.) To the extent that section 3.0, subdivision (a) prohibits planning of such a nature, it does not violate Business and Professions Code section 16600.

Finally, even though section 3.0, subdivision (d) of the IPA is arguably violates Business and Professions Code section 16600 as applied to Williams’ post-resignation recruitment of Apple employees (see AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923, 938; see also Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 945-947), the provision does not violate the statute to the extent it pertains to William’s solicitation of other employees during his employment with Apple (see Angelica, supra, 220 Cal.App.4th at p. 509).

Given that the first cause of action is based, in part, on portions of section 3.0 of the IPA that do not run afoul of Business and Professions Code section 16600, Williams’ argument regarding Business and Professions Code section 16600 fails to dispose of the first cause of action in its entirety. (See PHII, Inc. v. Super. Ct. (1995) 33 Cal.App.4th 1680, 1682 (PHII) [a demurrer cannot be granted as to only a portion of a claim].)

Williams also argues the first cause of action for breach of contract fails to state a claim because section 3.0, subdivision (a) of the IPA is procedurally and substantively unconscionable. Williams contends section 3.0, subdivision (a) of the IPA is procedurally and substantively unconscionable because “Apple, a trillon-dollar company, indisputably had vastly superior bargaining power relative to [him]”; the IPA is a contract of adhesion

“A contract term is unenforceable if it is both procedurally and substantively unconscionable. Procedural unconscionability is satisfied by a determination that the contract is adhesive, i.e., ‘a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation.]” (Wilens v. TD Waterhouse Group, Inc. (2003) 120 Cal.App.4th 746, 753.) Additionally, “[a]n adhesion contract will be considered substantively unconscionable if it is unduly ‘one-sided’ in favor of the stronger party. ‘[A] contract or provision which does not fall within the reasonable expectations of the weaker or “adhering” party will not be enforced against him …. [E]ven if consistent with the reasonable expectations of the parties, [a contract or provision] will be denied enforcement if, considered in its context, it is unduly oppressive or “unconscionable.” (Ibid.)’ [Citation.]” (Id. at pp. 753-754.)

Here, it cannot be said, as a matter of law, that the IPA is a contract of adhesion. The circumstances surrounding Williams’ signing of the IPA are not alleged in the complaint. There are no factual allegations in the complaint addressing the parties’ relative bargaining power or establishing that the IPA is standard contract and is non-negotiable. Thus, whether section 3.0, subdivision (a) of the IPA is unconscionable is a question that cannot be resolved on demurrer.

Next, Williams argues the first cause of action for breach of contract fails to state a claim to the extent it is predicated on his failure to disclose and assign inventions to Apple because Apple does not allege sufficient facts describing the invention he allegedly failed to disclose. He further asserts that Apple fails to allege that the subject inventions were based on its secrets or confidential information.

As is relevant here, section 1.0, subdivision (a) of the IPA states that “inventions” are all inventions, ideas, discoveries, documentation, and materials made, created, conceived, or reduced to practice by Williams, alone or jointly with others. (Complaint, Ex. A.) Section 1.0, subdivision (b) of the IPA provides that all inventions that (1) result from or are suggested by work performed by Williams for Apple or (2) are conceived or reduced to practice during Williams’ employment with Apple and relate to the business or products of Apple, or to the actual or demonstrably anticipated research or development of Apple, are Apple’s sole and exclusive property. (Ibid.) The provision further states that Williams will assign such inventions to Apple. (Ibid.)

In the first cause of action, Apple alleges that “Williams is developing products for NuVia based on work that results from or was suggest by [his] work at Apple and that relate to its business, products, research, and developments.” (Complaint, ¶ 49.) Apple further alleges that “Williams has failed to disclose and assign these inventions” to it. (Ibid.)

As Williams persuasively argues, Apple does not allege sufficient facts describing the invention Williams allegedly failed to disclose. The allegation that Williams was “developing products for NuVia based on work that results from or was suggest by [his] work at Apple” does not adequately identify the invention (i.e., the idea, discovery, documentation, and/or material) that Williams made, created, conceived, or reduced to practice.

Nonetheless, the first cause of action is not based solely on Williams’ alleged breach of section 1.0, subdivision (b) of the IPA. Consequently, Williams’ argument regarding that provision fails to dispose of the first cause of action in its entirety. (See PHII, supra, 33 Cal.App.4th at p. 1682 [a demurrer cannot be granted as to only a portion of a claim].)

For these reasons, the demurrer to the first cause of action on the ground of failure to allege facts sufficient to state a claim is OVERRULED.

2. Breach of Duty of Loyalty

Williams initially argues the second cause of action for breach of duty of loyalty fails to state a claim because NuVia was not founded until after he left Apple. In support of this contention, Williams cites to a Certificate of Incorporation of NuVia, Inc., which is attached as Exhibit A to the declaration of his counsel.

Williams’ initial argument lacks merit. “ ‘A demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice’ [citation].” (Hilltop, supra, 233 Cal.App.2d at p. 353.) Here, the date on which NuVia was purportedly founded is not alleged in the complaint. Additionally, the Certificate of Incorporation of NuVia, Inc. is not attached as an exhibit to the complaint. Moreover, Williams did not file a separate document requesting judicial notice of the Certificate of Incorporation of NuVia, Inc. (See Cal. Rules Ct., rule 3.1113(l) [“Any request for judicial notice must be made in a separate document listing the specific items for which notice is requested ….”].) Thus, Williams’ initial argument is based on facts that cannot properly be considered on demurrer.

Next, Williams argues Apple fails to allege facts showing that he breached the duty of loyalty because employees are allowed to plan and develop a competitive business prior to leaving their employment under California law.

This argument is not well-taken. As previously explained, an employee is not permitted to plan and prepare to create a competitive enterprise prior to termination if the employee does so on their employer’s time and with the employer’s resources. (Mamou, supra, 165 Cal.App.4th at p. 719.) This is precisely is what Williams is alleged to have done. (Complaint, ¶¶ 1, 4-6, 27-40, 46.) It is well-established that such conduct may constitute a breach of the duty of loyalty. (See Mamou, supra, 165 Cal.App.4th at p. 719.)

Williams further argues the second cause of action for breach of duty of loyalty fails to state a claim because the claim is preempted by CUTSA. Williams contends that the second cause of action is preempted by CUTSA because it is indistinguishable from a claim for misappropriation of trade secrets.

“CUTSA provides the exclusive civil remedy for conduct falling within its terms, so as to supersede other civil remedies ‘based upon misappropriation of a trade secret.’” (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal. App. 4th 210, 236.) Further, Civil Code “section 3426.7, subdivision (b), preempts common law claims that are ‘based on the same nucleus of facts as the misappropriation of trade secrets claim for relief.’ ” (K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 958.) CUTSA does not preempt claims that are related to a trade secret misappropriation, but are “independent and based on facts distinct from the facts that support the misappropriation claim.” (Angelica, supra, 220 Cal.App.4th at pp. 499 & 506.)

Williams’ argument lacks merit. Apple alleges that Williams breached a duty of loyalty owed to it by starting a competing business, NuVia, during his employment with Apple and failing to disclose “his work in the same space as Apple.” (Id. at ¶ 55.) Apple does not allege that Williams misappropriated its trade secrets confidential information, or proprietary information. The complaint does not set forth a claim for trade secret misappropriation under the CUSTA and Apple’s cause of action for breach of duty of loyalty does not relate to any such claim. Thus, the second cause of action is not preempted by CUTSA.

Finally, Williams argues that the second cause of action for breach of duty of loyalty fails because it is predicated on the inevitable disclosure doctrine.

“Under the doctrine of inevitable disclosure, ‘a plaintiff may prove a claim of trade secret misappropriation by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.’ [Citation.] The inevitable disclosure doctrine results in an injunction prohibiting employment, not just use of trade secrets.” (Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1458.)

This doctrine has no application here as Apple is not trying to prove a claim for trade secret misappropriation.

Accordingly, the demurrer to the second cause of action on the ground of failure to allege facts sufficient to state a claim is OVERRULED.

IV. Motion to Strike

Williams moves to strike: (1) allegations of the first and second causes of action; (2) allegations regarding text messages sent by Apple employees; and (3) Apple’s request for punitive damages.

A. Legal Standard

Under Code of Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading or strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436.) The grounds for a motion to strike must appear on the face of the challenged pleading or from matters of which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) In ruling on a motion to strike, the court reads the pleading as a whole, all parts in their context, and assuming the truth of all well-pleaded allegations. (See Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63, citing Clauson v. Super. Ct. (1998) 67 Cal.App.4th 1253, 1255.)

B. Allegations in the First and Second Causes of Action

As a preliminary matter, Williams argues the Court should strike various allegations from the first and second causes of action for the same reasons articulated in his demurrer on the ground of failure to allege facts sufficient to constitute a cause of action. (Mem. Ps. & As., pp. 11:15-16, 13:12-14, 14:16-17, 17:8-10, & 18:14-15.)

However, the majority of Williams’ arguments lacked merit for the reasons discussed above. Moreover, a failure to allege facts sufficient to state a claim is a basis for demurrer, not a basis for a motion to strike.

Thus, the motion to strike those allegations from the complaint is DENIED.

C. Allegations Regarding Text Messages

Williams argues the Court should strike allegations pertaining to text messages sent by Apple employees because those messages are confidential communications under Penal Code section 632 and are, consequently, inadmissible.

Penal Code section 632, subdivision (a) states, “A person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500) per violation, or imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.” Subdivision (c) provides that a “confidential communication” means “any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes a communication made in a public gathering or in any legislative, judicial, executive, or administrative proceeding open to the public, or in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.” (Pen. Code, § 632, subd. (c).) Finally, subdivision (d) states that, “[e]xcept as proof in an action or prosecution for violation of this section, evidence obtained as a result of eavesdropping upon or recording a confidential communication in violation of this section is not admissible in any judicial, administrative, legislative, or other proceeding.” (Pen. Code, § 632, subd. (d).)

Here, there are no allegations in the complaint establishing that the text messages were obtained as the result of eavesdropping upon or recording a confidential communication in violation of Penal Code section 632. Moreover, Apple is not required to affirmatively plead facts demonstrating that a violation of Penal Code section 632 has not occurred.

Thus, the motion to strike allegations regarding employees’ text messages is DENIED.

D. Punitive Damages

Williams argues the Court should strike Apple’s request for punitive damages because Apple does not allege sufficient facts establishing that he acted with malice, oppression, or fraud.

In order to plead a claim for punitive damages, a plaintiff must allege the defendant was guilty of malice, oppression, or fraud and the ultimate facts underlying such allegations. (Civ. Code, § 3294, subd. (a); Clauson v. Super. Ct. (1998) 67 Cal.App.4th 1253, 1255.) “Notwithstanding relaxed pleading criteria, certain tortious injuries demand firm allegations. Vague, conclusory allegations of fraud or falsity may not be rescued by the rule of liberal construction. When the plaintiff alleges an intentional wrong, a prayer for exemplary damage may be supported by pleading that the wrong was committed willfully or with a design to injure. When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.” (G.D. Searle & Co. v. Super. Ct. (1975) 49 Cal.App.3d 22, 29, internal citations omitted.) If a claim for punitive damages is not properly pleaded, it may be stricken. (Grieves v. Super. Ct. (1984) 157 Cal.App.3d 159, 164.)

Apple seeks punitive damages in connection with its cause of action for breach of duty of loyalty. There is no allegation of deliberate injury made in connection with this second cause of action. In opposition, Apple contends that Williams intended to cause injury to it, but nowhere in the complaint does Apple allege that Williams intended to injure it. Instead, Apple merely alleges that “Williams’s breaches of his duty of loyalty were done with malice and oppression, thereby entitling [it] to an award of punitive damages.” (Complaint, ¶ 57.) These conclusory allegations are wholly insufficient to support a claim for punitive damages.

Accordingly, the motion to strike Apple’s request for punitive damages is GRANTED, with 10 days’ leave to amend.